indicted. the last we heard from him publicly in my substance was outside the court in winston-salem, north carolina, and he actually went to court. he said he wasn't guilty, he didn't do anything wrong. we might hear move on this. >> thank you, joe johns. we appreciate it. you know it's hot around the country, politics are heating up. it's always cool in "the situation room" where we go to now with wolf blitzer. take it around. only 11 days before the deadline, we have new information coming in about a possible framework and the sticking point. stand by. power, water and waste plants across the united states may be vulnerable to a terror attack from within. i'll ask the homeland security secretary janet napolitano about her department's disturbing new warnings.

you isle ask the former pakistani president musharraf in he knew osama bin laden was hiding in his homeland and if he knows terrorists may be holed up in pakistan right now. i'm wolf blitzer, you're in "the situation room." first, a powerful reminder today, if they don't reach an agreement in the next 11 days, all hell could brea look. standard & poor's is warning the nation could be shoved back into recession very soon after the august 2i deadline passes with the clock ticking and stakes rising, our own jessica yellin learned that leaders plan to meet this hour at the white house. we're learning a good deal more about where the talks stand. kate bolduan has the latest. what do you know? >> both sides, all sides are

cautioning and stressing that there is no deal. we are learning that president obama and house speaker john boehner are making a fresh drive to strive for one maybe last effort on this some of the ideas could include $3 trillion in debt reduction. that could include spending cuts of possibly a trillion or more, entitlement reform that could possibly include changing the age eligibility for -- of medicare, and also on the issue of revenues, there's discuss of whether the bush era tax cuts for higher income earners should expire and whether tlvd be a promise, a commitment to a brought tax overhaul as part of this discussion, but i'll tell you, when word of these details, of these ideas came out, house speaker john boehner went on the rush limbaugh radio show very

quickly, really in an effort, it seemed, to tamp down expectations. he said very clearly while all lines of commune scalings remain open, there's no deal, no deal publicly, no deal privately. eric cantor echoed what john boehner said, that he's unaware of any deal that's been struck, bur he did add there are all kinds of options on the table. those options are getting a lot of attention today. >> case, new information on the republicans, what's called their cut, cap and balance legislation. it passed the house earlier in the week. now it's supposed to go to the senate. what are you picking up? >> reporter: passed in the house. we're now hearing that senate majority leader harry reid has moved and says he wants to vote on it tomorrow. he of course has been opposed to it all along.

we heard from aide that a vote could effectively table it. >> it doesn't look like they have 60 votes, and even if they have d. thank you very much, kate. most americans say they fear a crisis or imagine problems, but look at this brand-new cnn lorc poll, about a third say they prefer budget plans with only spending cuts. >> clearly there's an enormous amount of pressure on the white house, and members of congress as this debt drama plays out. a lot of that is super lobbyists. lisa sylvester has been exploring this part of the

store. >> lobbyists are required to -- and we now have information on the most recent quarter that ended in june. in a three-month period, an astonishing amount of money was spend on lobbying. one of the biggest issues, the debt ceiling negotiations and potential fiscal cuts. senate lobbying disclosure records show more than 140 groups, including aircraft owners, farmers, unions, physicians, oil companies, and realtors, all lobbying to save tax breaks or prevent spenting cuts. stakeholders in the debate or spending millions. here's what a group shelled out in just a three-month period, lobbying the government on various issues, including the debt ceilings. the u.s. chamber of commerce, $9 million. aarp, pfizer, 3.5 million, america bankers association, 2.3

million. afl-cio, 880,000, the aircraft owners and pilots association, 730,000, and the american farm bureau, 560,000. the sunl.i.f.e. foundation, a government watchdog group says there's a lot riding on the deficit negotiations. >> basically washington spends a lot of money, the biggest customer in the world, so businesses, labor unions, all kinds of other interests, they want the spending to kin. >> mary kate thatcher is a lobby i ist. >> well, it's tough to keep up on. certainly we're worried about how much gets cut. very much we're getting closer to a balanced budget. >> reporter: the national association of realtors spend $7.1 million lobbying in the second quarter of this user, nearly double what they spent over the same period last year.

realtors are worried the mortgage interest deduction for homeowners could be eliminated. >> if it went away or severely curtailed it would add wind more level of uncertainty. >> with potential $3 trillion in federal deficits on the line, special interest groups are angling to have their say on what is in and what is out. >> these lobbying spending numbers are through june, of course. in the last couple weeks there's been a frenzy of lobbying activity going on. the sunlight organization anticipate a huge bump-ultimate up 234 the amount of money spent. >> and they're only just getting started. thanks very much, lisa. we'll have much more later in "the situation room." right now a chilling new warnings about terror on u.s. soil. the department of homeland security alerting law

enforcement officials about possible threats to utilities across the country, plants vital to our way of live. let's bring in susan candiotti. she has the latest. >> this new bulletin was sent tuesday to law enforcement agencies, about an ongoing threat to the u.s. infrastructure. trespassers planning attacks on gas, water and other power plants are one thing, but danger can also come from within. a new department of homeland security bulletin obtained by cnn warns, quote, insiders pose a significant threat to private and public utilities. this spring a disgruntled employee managed to shut down a system that could have caused a massive sewage backup. the suspect made this bizarre 911 call. >> i have basically taken the

plant hostage. >> last january, gas service was cut off to almost 3,000 customers in illinois when a recently fired employees broke into a monitoring station and cut off a valve. dhs has not linked either case to saeb sabotage to al qaeda. sharif worked at five nuclear power plants doing maintenance work, then moved to yemen to follow anwar al awlaki. he was named after he allegedly expressed militant islamic views. mobley admits he admeyers al awlaki, but is not tied to -- to encourage attacks on sensitive locations. a u.s. officials says this week's warning is not based on new intelligence nor from a

treasure trove of material confiscated from osama bin laden's compound. dms tells cnn there is no credible imminent threat. however, the several previous incidents illustrate an ongoing need to be on guard. wolf? >> good advice indeed, thanks, susan, very much. later this hour i'll be speaking with janet napolitano about the threat to america's utility plants, also about concerns of a terror attack exactly ten years after 9/11. stand by for that interview. also new information and new tally of what taxpayers lost by bailing out chrysler. the price tag is big. we've been using cnn's global resources to explore the heartbreaking famine in so somalia. how kenya is suffering as well. stay with us, you're in "the situation room." mine was earned over the south pacific in 1943.

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"the cafferty file." members of the so-called tea party have taken a very hard line and they're not budging from it. deep spending cuts, no new taxes or no deal. their inwillingness to compromise has not only hurt the chances on a deal, but damaged the negotiating power of their own party. boehner and mcconnell, who have grown more open to compromise as the clock continues to tick. it's a tough place to be for the republicans who aren't buying the tea party message and there are some, particularly those in the senate who have shown indeed in the gang of six bipartisan compromise. in the passage of the so-called cut cap and balance bill proves that. it requires steep ser spending cuts. of course, the bill has little

or no chance in the senate and the president says he'll zito it. meanwhile, that clock is still ticking. in the end house republicans may be forced in order to avote a government default, and to save face with constituents. either way, if a deal is reached on the debt ceiling by august 2nd, well, we'll find out just how much or how little power the tea party has, depending on the form of the deal. will the tea party's hat line on the debt ceiling ultimately help or hurt them? go to cnn.com/caffertyfile, and post a comment. david gergen wrote a nice column on cnn.com, the slug is, this is no way to run a country. boy, is he right. >> he certainly is. thanks very much, jack. in southern somalia, it's the worst famine in years, people are on the verge of starving to death. many already have. in a remote region, chronic

drought is creating similarly desperate conditions. cnn's jim mckenzie is on the scene. >> -- in the remote villain of kapua, they're angry, with the world focused on famine in somalia, they want to tell their stories. outside of the media glare, people like alice are barely surviving. she lost all her livestock months ago to the drought. a proud no kneadic herder her whole life, she now depend on food aid. this is the worst year i've ever seen, she says. there's been no water, and the animals have died. now there's no food. she must feed emanuel wild fruit and dirty water, which makes him sick. he was born with a twin sister,

miriam. she died in may. i'm doubly cursed, says alice, because i gave birth to twins during a drought, and miriam died because of it. here in northern kenya, it's part of a downward spiral. the rains are coming less frequently, the droughts more often. this is a chronic emergency. tony lake, the head of unicef, says we need to focus on the big picture. >> while there are a lot of lives endangered here, there's a way of life that's endangered, and it's a damn shame. >> reporter: it would seem this is an extremely vulnerable population when compared with the world's population. how would you assess it? >> this is the most fragile situation i have seen, anywhere. >> reporter: the dry season will last for several more months, at least. the longer-term view is also

grim. the people are asking one thing -- don't forget them. cnn, tekana, kenya. tony lake was clinton's first national security adviser. i want to thank him and everyone else who is helping. you can help as well. to find out what you can do to make a difference, visit or impact your world page. that's at cnn.com/impact. go there and do something. this is a horrible story, we're going to stay on top of it. one of the main sources of financing insurgents. now opium poppy seeds, a very large cache has been seized after a raid in afghanistan. taxpayers still incur a huge loss. we'll tell you just how much. im- t the motorola expert from sprint. its powerful tools help you work faster and smarter so you can get back to playing "angry birds." it lets you access business forms on the go,

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lisa sylvester is top stories, including the latest on the nfl. what's going on? >> that's right. the 4-month-old nfl lockout could be nearing an end. the league's 32 team owners are meeting in atlanta, where they are expected to vote on a new labor agreement. the players are also planning a vote, but nfl players association executive director says there are still some outstanding issue toss resolve. uncle sam is no longer a stakeholder in chrysler. the taxpayers lost in the bailout. the government recently sold its remaining 6% stake to fiat for

$560 million. the government originally loaned chrysler $12.5 billion, $11.2 billion of this was repaired. almost half a million pounds have been confiscated. the find was the result of a joint raid. opium poppy can be used to make heroin and drugs, is considered a main source of funding for insurgents. at least 22 deaths are being blamed on a blister heat wave that's covering you much of the united states. the national weather service says 55 record highs were broken yesterday. triple-digit temperatures are expected to remain ace cross the even u.s. in chile, however, it's cold weather causing problems there. they declared a catastrophe after a heavy snowstorm left roads blocked. you can see that snow in chile, that we're having they record-high temperatures. >> it's wind, and it's cold.

it's summer here, it's hot. >> we're getting the extremes. >> thanks. as soon as the death of bin laden, is the u.s. gunning for the most warranted terrorist dead or alive? i'll have the homeland security secretary janet napolitano. with time running out, will there be any winners in america defaults?

i'm wolf blitzer. stories we're working on in the next hour. pakistan's former president pervez musharraf speaking out to "the situation room" about why osama bin laden was able to hide out in his country for five years. could is there be an opening for republicans in the debt stalemate after new signals from one of the leading activists about the bush-era tax cuts? and san gentleman gupta meets up with a mini darth va r vader. it's a cnn exclusive.

i'm wolf blitzer, you're in "the situation room." ten years since the -- as we get closer, there's a lot for the department of homeland security to worry about, including its brand-new alert about possible threats to utility plants across the country. joining us now, the secretary of homeland security, janet napolitano, madam secretary, thank you for coming in. >> oh, thank you. there are fresh concerns that terrorists or terrorism sympathizers may have infiltrated, including nuclear power plants. is that true? i think that's report is based on information sharing report of the time we put on the in the normal course of business.

reminding people what they need to be watching out for. >> we do know one individual was arrested. he managed to nfl trait five plants in america? >> indeed. that's why you're utility operators need to be constantly ving tachbt. there are lots of things we need to be watchful for. we are asked or asked by the consequence, to keep information flowing out to the private sector. this was part of our respond. let's talk about the tenth anniversary. my sources are telling me we should be deeply concerned, because al qaeda may be looking for revenge, retaliation for the u.s. killing bin laden.

how concerned should the american public be right now in or around 9/11 al qaeda could retaliate in a major way? >> look, you know, immediately after the death of bin laden there were lots of speculation about rethattia torrie attacks, but nothing specific or credible, so we didn't raise the nation's alert level. we continue to watch, to listen, to observe, if there's something specific or credible that comes in, we'll be able to raise an advisory and tell people what it is we know. >> they're very patient. they look at this in terms of long term. i've been told he wants revenge in some way. i don't know what his capability is to engage in another 9/11. does he have that capability? >> no. when you look at pre-9/11 and post-9/11 united states, you

realize how far we have come in terms of information sharing, passenger screening, vetting within the airports themselves. the ability to exchange communications between military, air traffic control and the like. much difficult now. >> has there been a shift in their strategy? smaller scale operations? >> i think the kind of mattive international plot that led to 9/11 would be difficult to accomplish today, so yes, what we see are smaller plots involving fewer people, more difficult to interrupt, but we've seen several. we saw the attempt on flight 253 on examines dame in '09, the attempted cargo bombings in october of this past year. different types of plots, constantly evolving. we have to constantly evolve and

we have to have multiple lair es, so if one layer misses, there's another to pick up. just to be precise, as of now you're not planning to raise the threat level, are you? >> right now we have no specification, credible intelligence that would suggest that we should. >> even out of an abundance of caution, even though the u.s. found information in the dom pound that he wanted to do something -- >> look, aspiration versus ability and actual plot are very different things. but should we evaluate in the whole picture and decide, yes, in the context of the entire picture we should raise the alert level, we will do so. >> if the u.s. had credible information, would you, would the president thofrize killing him like he did with bin laden? >> the president has those options. they're very carefully circumscribed, but our whole

goal is to make sure the american people remain safe, from all the other al qaeda groups. al shabab another one, aqab, and we also have home-grown terrorism. we have to be alert to those. >> what they call the lone wolves? which are particularly difficult. they're not plotting with anybody, therefore no communication to intercept. >> but inspired, if you will, by someone like anwar al awlaki in yemen. you tried to kill him after bin laden, but narrowly missed, right? >> they are inspired, it is that ideology, and awlaki has been a very active propagandist, as it with. >> he is wanted dead or alive. >> he is wanted.

>> dead or alive? >> yes. >> even though an american citizen? >> this has been of concern, but yes, he's a very active member of al qaeda. >> let met read from this new report. one of your conclusions -- while america is stronger and more resilient as a result of these efforts, threats from terrorism persist and continue to evolved. today's threats do not come from any one individual or group, they may originate in distant lands or local neighborhoods. they may be as simple as a homemade bomb or as sophisticated as a biological threat or coordinated cyberattack. i know you're concerned about cyber-warfare right now. i didn't see concern about some sort of nuclear threat, a nuclear device being used against the united states. is that unrealistic or realistic? >> you know, the conclusion is meant to suggest that we could be focused just on onening or

one group. we have to focus on many different types of tactics, different types of techniques, and so we do have concerns and work done in the nuclear realm, the biological realm, the chemical realm, all of the different tactics that could po templeally be used. >> are these terrorists any closer to getting their hands on some sort of device? >> i think biological is somewhat of a greater concern, chemical as well, and different types of poisons, different types of things that could be used to attack an innocent citizenry. there are different things we have to be able to do. we have to be able to collect intelligence, and shared intelligence on a realtime basis. that ability to share, check, receive intelligence back didn't exist prior to 9/11.

we have it now. >> good luck. >> thank you. >> we're counting on you. >> thank you. >> madam secretary, thanks for coming in. >> you bed. is the u.s. military's -- it's the military's drone of the future, i should say. brian todd got an inside look. will washington officials throw a hail mary pass to prevent the u.s. from plunging into a debt disaster donna brazile and alex castian no, sir are standing by.

it's the latest in drone technology. it sounds something like straight out of a sci-fi movie. it's in the testing stages right now. our own brian todd got a firsthand look. >> reporter: wolf, we're here to test out the propulsion capability of the next wave of uavs. this is the ad-150 made by american dynamics flight systems. what's unique is the ability to lift off like a helicopter. in the do that with this ability of the a nacelle. it turns, and what we're testing out today is the capacity to

make that transition. will it have the propulsion capability to make the transition from vertical to horizontal flight without this vehicle crashing. this vehicle already similar to our uavs with avionics, intelligence-gathering, weaponry, and a payhold of up to 1,000 pounds. they also want this to fly on missions ahead of the osprey helicopt helicopter. they want it to fly ahead and gather intelligence, maybe strike targets. this will be a crucial test. what they will test out here is the ability of this piece of machinery here, called the nacelle, on the propeller end of the wind. we're here at the glenn martin wind tunnel at the university of -- for this test we're only going to go at about 30 miles an

hour, just again to see if it has the ability. we're going to go into the wind chamber and test that out. they're using smoke so they can visualize the airflow, see if it does have that xae. this is a scaled-down version of the nacelle. the real ones are a lot bigger. it's about 17 1/2 feet from wing tip to wing tip. >> okay, wayne, you've seen it, tested it out in the computer, does it have the capacity to transfer? >> most definitely. the results we're getting from this test were extremely encouraging. >> the military will want to put wounded soldiers, possibly a huge payload. will it have the capacity to do that? >> most definitely.

it can certainly do that mission. we may have to do some additional testing, but by all means. >> reporter: wayne, good luck. the makers want the first flight ready by january 2013. each one of these vehicles will cost the military a few million, but the makers say that's a lot less than the average of a similar size. thank you, brian. time is running out for a deal. are there enough votes in congress to avoid a government default? the ugly feud between two members of congress from florida. 'electric castellanos and donna brazile are here to talk about that.

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let's get right to our "strategy session." the democratic strategist donna brazile and republican strategist alex castellanos. what's the latest? is the president getting ready to what some democrats fear, sell out the liberal base of the democratic party? >> i don't believe he's trying to sell out anybody.

>> but in order to avoid default? >> i think there's still many options on the table. maybe the republicans are going to finally come to their senses, the senate democrats will vote down the ridiculous bill that the house passed yesterday. and others will be able to get back to the president, and come up with a deal to put this country on a great fiscal path. >> if they don't, i'm concerned there may not be enough votes. even that fail-safe mcconned/reid position to avoid a default. i worried about that. >> wolf, you should le. i talked to the republican congressman not long ago, one who just does not want to vote for raising the debt ceiling. he said, look, we gets it. we understand this could push us over the edge, no social security checks, all these terrible things. shouldn't we step in front of the that bullet now? do we want to pass that along to

the kids? i believe barack obama is right, we have to do something now. that's why republicans are -- one man's intrance jens is another man's courage form the republicans are motivated to do something big here and reduce spending. >> the former president, bill clinton, he agreed with some when he said the other day, if necessary, to avoid default, the president should invoke the 14th amendment to the constitution and just do it, without any formal legislation. you think that's a good idea, if necessary? >> first of all, i like what the president said. unfortunately i took a look at the legal implications and read what a constitutional scholar says, and congress has the authority to raise the debt ceiling. >> let me read from the 14th amendment to the constitution, and all of us legal scholars will discuss -- the validity of the public debt of the united states, authorized by law, includes debts incurred for payment of pensions, and bowenius for services in

suppressing insurrection or rebellion, shall not be questioned. some have interpreted that as the president has the authority in order to avoid this kind of disaster. >> he may, but even if he does it would be a disaster and a precedent-breaking -- it would roil the markets. he doesn't have a problem on his left. chances are they're going to voight for barack obama next election and not the republican. his problem is in the middle. if he can become the president that does soming about the debt, that actually puts us on curve down to reduce the problem, it's the best single thing he can do. >> i think the president is not concerned about the reelection at this point, though that is important. it's to save the world's best economy from default. alex and i were talking. we both went to the bar, we had a great time, you walked out, i have to pay the bill. that's not the way it works -- >> i thought you were buying.

>> no, i was not buying it's your turn to pay the bill, too. and alan west, the republican congressman and debbie wasserman schultz, it's so nasty, but what's intriguing -- he called her vile, repugnant -- they're using this for fund-raising purposes. steve israel, who chairs the democratic congressional compare committee, west thinks he can attack a respected legislator with this hate-filled screed. allen west has shown us his true colors. he as his own fund-raising e-mail, from allen west. her agenda isn't to improve the lives of floridians or stand on principle. she's an attack dog for the liberal progressive win, and it's times like this i need

friends with me. please make a dough nay of $25 or more at my website right now. i don't remember a personal, bitter feud eye merging like this in a long time. do you? >> oh, yes. this is politics. >> where somebody called >> somebody called another member of congress vile? >> i heard a lot. they need to back down a little bit. >> he has not apologized. >> and he should. the dnc has a link. >> act like a lady even when they aren't. are it's understandable why she got under his skin. republicans wanted to bring back jim crowe. alan west say black republican and you can accuse him of a lot of things. nevertheless -- >> they denied people the right to vote by voersing them to show a voter id. the dnc is not raising money off

of this. debbie moved on. the dnc has not. she used to chair the committee. she is not fund-raising and she is the chair. it's not her brother. the second thing, wolf, if you take a look at what the representative said in the past against his other opponents including him, he is constantly going-over the edge with the attacks. she was referring to his vote on medicare. >> just when we thought no one would replace her. she has got to be careful. she is effective at raising dollars, but she could become the alan grayson. >> they may be trying to give a lawmakers a stalemate. the definition of what is in the tax hikes.

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the question this hour, will the tea party's hard line negotiating position on the debt ceiling talks help them or hurt them. the tea party hard line position will take its toll in 2012. americans want leaders to leave with reabl reasonable solutions and compromise. the tea party mantra of our way or the highway has run its course. our rights i think people who were not paying attention are paying attention now. we see the agenda for the republicans and what it is. destroy social security and pay masters at any cost. they get the trash. in par ump, nevada, they are looking like a party that doesn't pay bills or honor obligations. i think it will definitely hurt them. when you refuse to negotiate

like and act like a spoiled child, it hurts your cause. house speaker boehner is a puppet on strings. they are not thinking about what's best for the country, but how to get rid of president obama. >> hard line purity will ultimately hurt them in the nation founded on political compromi compromise. the process has been based on negotiation and compromise. the tea parties have gridlocked governing and threatened to drive the economy off a cliff. disabled veterans and poor children and the elderly will be hurt if the tea party gets its way. jim said it will hurt them and hopefully it causes the extremists to be voted out in 2012. every time i hear on the news, it makes me wonder what they are putting in the tea they are drinking.

go to my blog. wolf? >> life and death in a wealthy southern california community. a family's bloody nightmare creating shock and suspicion. sandra is in coronado, california. >> it's a puzzling mystery in this ocean-front community. this historic mansion behind me, a possible crime scene. it started on machine when police say 6-year-old max fell down the stairs of this 27-room mansion near san diego and was rushed to the hospital. two days later, 32-year-old rebecca was found naked, hanging for a second story balcony in the home. her hands and feet were tied together. >> what are strikes you as most unusual about the case? >> the case is suspicious. no question about it. any time you have a female found in a back yard or courtyard unclothe and her feet and hands are bound, that is concerning.

>> the ceo is max's father. his son later died from the injuries. he said he wasn't there when she die and what happened to her is still a mystery. >> in this case, suicide and homicide can look similar. it's important to take your time to process the evidence and usually the evidence will solve the mystery. >> the sift is telling people she doesn't believe her sister would take her life. she said my sister did not commit a suicide. she was not depressed or frantic. she was planning to call my parents the next day and planning to keep me posted about max, the next day. it's a sentiment other who is knew the victim tell cnn. more than 15 detectives are working on the case and officials say they are taking the accounts of people who knew her very seriously. as for max's death, police are

preliminarily calling it an accident, but it's definitely part of the equation when considering it. >> any time there is a death like this, we look at victimology. what happened days or weeks or months before, max's case is of interest to us. >> they show a rocky relationship between jonah and max's mother. bowl filing disturbance reports in 2008 and 2009. the two issued a statement downplaying the records saying our marriage did not work out as either of us hoped, it did produce a wonderful son, max. both of us loved him very much. his loss is unimaginable. >> local law enforcement said they are waiting for the missing pieces to the puzzle and that could take a matter of weeks. wolf? >> thanks. you are in "the situation room" happening now.

the white house said there is no deal suggesting democrats and republicans are close to an agreement the we are learning about a potential plan being discussed. stand by >> weighing in on bin laden's death, the new leader is even revealing whom he is convinced is about to announce he will be running for president of the united states. you may know him as little darth vader. you will find out why this youngster is bringing his force right here to washington. wie want to welcome our viewers around the world. breaking news. headlines and jeannie moos all straight ahead. you are in "the situation room" . first the intensified gridlock over the debt crisis in washington as time runs out for both parties to agree on a solution. right now, democratic leaders

from both chambers of congress are meeting with president obama and vice president biden at the white house. sources say a three trillion dollar deficit plan is under discussion. they are stressing that nothing has been agreed to yet. let's go straight to jessica yellen. what are you learning? >> this debt deal, you can call it jello that is yet to harden. congressional democrats necessary their meeting with president obama and working the phones all day. many congressional democrats are frustrated. they feel that the outlines of a possible new deal are coming together too late to get something done. they fear based on what they heard so far, they are not exacting enough new revenue from republicans and they might be forced to take too many concessions at the last minute. the white house said that's silly. there is no final deal in anything the president agrees to in the end would ultimately

include revenue as you can see. this is still very much up in the air. 12 days for potential default and finally the glimmers of a deal, but it's far from done. according to a new cnn poll, 61% of americans believe if the debt ceiling is not raised, it will be a crisis or major problem for the nation. not happy this process has been washington at its slowest and most gridlocked >> i blame both parties for the stalemate. >> all of the people who are responsible for this are elected to do a job. if i did my job like that, i would be fired. >> who would get fired first? right now the republicans are losing the pr war. only 33% of the american people believe republicans have acted responsibly in the debt dealings.

52% said the president acted responsibly. white house officials say they are confident they will strike a deal in time, but will the president come away from this unscathed? after all, remember this? candidate obama promised he would end the polarization in washington. >> our voices are more powerful than the most entrenched in washington. the most vicious attacks. the status quo that wants to keep things just the way they are. we will change how politics is done in washington. time for change in washington. >> we will see if there is a change here tonight. so far there is no meeting scheduled between the president and republican leaders from the hill. we will keep you posted if that changes. >> very much a work in progress. let's get to the man who is behind what many are seen as a stumbling block to the negotiations. the backlash against any form of what is seen as the tax

increase. the conservative crusader sponsored a pledge. the increase and now that pledge success called into question. let's bring in joe johns working this part of the story for us. he was here in "the situation room" not that long ago. what have you learned? >> interesting guy. he was and still is frankly one of the most powerful guys in washington. you will hardly ever hear about today people are asking if grover has given republicans who signed that pledge a way to go back on the promises without going back on promises . >> most but not all congressional republicans signed a pledge to oppose tax increases. it's controversial, but now that washington is trying to increase the debt limit and get a deficit reduction that calls for cutting spending and increasing revenue, all of a sudden the pledge is tying people up in knots. a tiny bit of wiggle room seemed to appear in a "washington post"

editorial quoting grover norquist, the head of american taxi o reform, the guy who came up with the pledge. republicans might be able to allow the cuts passed in the bush era to expire without technically violating the pledge. his conversation with the post was recorded. >> not continuing a tax cut is not technically a tax increase. >> for does not violate the pledge? >> we wouldn't hold it that way and allow the guys on the hill to. >> including the head republican, house speaker john boehner. >> i never voted to raise taxes and i don't intend to. >> democrats pounced. >> when are it comes to enforcing the republican party's anti-tax pledge has given house republicans a hall pass. >> cnn asked to clarify, but it was too busy and they put out a statement saying eye it's

violation in the protection to trade temporary tax reductions for hikes. at least one rank and file freshman said the voters will give him a pass on the pledge he saw. >> at the time a lot of the pledges were signed, we were not talking about him defaulting, a potential downgrade to credit worthiness. >> on the issue of raising taxes and whatever you want to call it, we will have to watch and see how many house republicans want to take a second look as the pledge and other things sort of crash up against this deadline. >> the current bush taxes in effect, the highest arrest is 35%. if it goes back to what it was and expires during the clinton administration and goes up to 39.6%, wouldn't that be an increase in taxes? >> it's hard to dispute. what else will you call it. it's not a tax decrease.

>> that's why they said it wouldn't be a decrease necessarily. >> you love to hear more from him about his reasoning. it did seem he didn't exactly back away from it, but he distinguished it and said i would oppose it if this happens >> let's get more on what's going on. the chief analyst and the managing editor of time magazine, you can see the cover. i will show the cover of the new issue of time magazine. chore war is the story in the new issue of time magazine and the publication. let's talk first, whether you are a house republican and what are they up to right now? it's getting more confusing and it's certainly in my mind and i'm sure in yours, house republicans are key. not the senate and the house republicans have the power. >> wolf, you were just talking to joe about the question of the

expiration of those bush tax cuts for the wealthy. that's important here. it's clear that house republicans would not like to see those expire in a perfect world. in fact, they are due to expire in 2013. yesterday i spoke with the chairman of the house budget committee paul ryan. he made the case that if they expire, there you are. republicans have given a tax increase. take a listen to this. >> the compromise. what about compromise. >> balance has occurred with respect to taxes and that's a massive increase scheduled to occur in 2013. don't forget the fact that a new tax increase because of the last two years of congress is kicking in in a little over a year. >> wolf, of course that is likely to happen. if president barack obama is

reelected. while i don't think that paul ryan is willing to concede the next presidential election, he sounded as if he was factoring that into his budget equation saying we already gave it the office on taxes. don't talk to us more about it. >> let me bring rick into the conversation. what do you make of it? >> washington speak is a language of its own. the expiration is not a tax hike. remember in washington people said the reduction in the rate of increase say cut. it's not. this is something that republicans have to get used to and we as americans have to get used to it. it has to be a combination of revenue enhancement and reducing the debt. these negotiations are not a suicide pact. i think both parties realize that eventually they will have to come to an agreement and somebody will swallow something they don't like. that's politics. >> you know there democrats right now very, very nervous,

liberal democrat that is the president may be in the end agreeing to the spending cuts and defer what's called the revenue or the tax increases down in order to avert a disaster which would be a default. what do you make of that? >> the leader reid is concerned about that. everybody has their own interest here. they are not aligned. the senate's interest and barack obama's interest are not aligned. they can do a deal like that that would help, but not help senate democrats. that's the problem here. everybody sees it from a different perspective. >> are we closer to a deal some. >> that's the big question. jessica earlier called it jello. i think it's true. i think what we see right now with all of these numbers that are being floated is that more and more things are getting put on the table. the leaders are taking them back to their membership. the president is now meeting with republicans separately from

democrats he needs to see what each side is willing to give and as you know, the internal physics of this is that there is never a deal until there is a deal. i spoke with one democrat who is close to the negotiations who said to me, gloria, next week we will at this time be a little closer. >> take the big picture for us and step back. how does this debate that is unfolding right now with the possibility that it is a real possibility of default look to the american public? >> i think the piece that you did earlier, people look like this is the gang that couldn't shoot straight from both sides. they elected politicians to solve problems precisely like this. if you look at the macro economic picture, the amount of taxes that americans are paying as a percentage of gdp is one of the lowest since world war ii. there is lots of flexibility and the american public wants politicians to work together.

that is a no brainer. >> in the end, i think public spn probably going to make this deal get cut. the american public believes that politicians are not behaving and republicans are getting much more blame than barack obama. barack obama's numbers are not great, but republican numbers are worse. in the end, it's going to be in everyone's self interest, not only the country's. >> the former president of pakistan, mushareef is weighing in on the u.s. raid that killed osama bin laden. you will find out what he said is extremely embarrassing about it in my knew. with president mushareef coming up. you probably know him from his now famous super bowl ad, but you may not know the touching reason why this little darth vader is about to come right here to washington. no, it's just for new people.

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an appeals court said freedom of speech dismissed a charge with assassinating barack obama. a california man posted violent racist messages on a message board. one posting said shoot the [ bleep ] using a racial slur to describe obama. they said he would end up with a 50 caliber in the head soon. the secret service said track this clown down. within weeks, he was in custody. turns out he had a 50 cal perlifl and ammunition in his possession. he was arrested and after waving his right to a jury trial, he was convicted by a federal judge for threatening to kill a presidential candidate, but yesterday a court of appeals in, wait for it, san francisco

overturned that decision. in a 2-1 ruling, the court said his actions were protected by the first amendment and his words were alarming and dangerous, they were not illegal. he expressed no intent to act on his words. he had guns he talked about in his possession the prosecutors can either ask the appeals court for a rehearing or appeal a decision to the u.s. supreme court. after he was initially convicted in 2009, he apologized for his actions and said he posted the messages while drunk. apparently in his mind that made it okay. he was sentenced to two months in a halfway house in addition to the 24 days he had served in jail. here's the question. should calling for the assassination of the president of the united states be protected as free speech. go to cnn.com/cafferty. here's a hint. no. wolf?

>> medicaid is one of the hottest issues e menjing, but behind the numbers are real people. our chief medical correspondent sanjay gupta spoke with a young man you might recognize. sanjay? >> next week washington will feel the force, so to speak. he is a little guy with a big mission. take a look at who i met when i was in l.a. >> dr. gupta. you're it. >> i'm it. >> max paige only knows one speed. full supreme ahead. >> i don't know if i can keep up. >> you have probably seen max before even though you may not know it. remember this volkswagen ad from super bowl xlv? darth vader? just max. within seconds of meeting him, max was asking about my daughters. >> let me guess. 4-year-old? 2-year-old. >> yep.

you got it. how did you know? >> we are at the children's hospital of los angeles with max and his brother to see a doctor. >> getting your pacemaker checked? >> uh-huh. >> that's right. max has a pacemaker. it's his third and he is only 6 years old. for his parents, the first sign of trouble came before max was born. >> my 38 week appointment we found out that max had structural damage to his heart. they couldn't get a heartbeat. they took him for an emergency c-section. >> the last feeling i remember is it's almost hopelessness because it's out of my hands as a dad and as a dad, that's not something you are used to. >> i simply said save my son. i don't know what you just said and i don't understand anything you will do. i need you to save my son. i need to have a chance to know this kid >> it's hard to imagine, but for mom and dad, it was a blur.

she had a heart condition that is rare and includes four separate problems in the heart that leads to a lack of oxygen in the blood. without a pace maker and 8 major operations so far, max probably wouldn't be here. >> can you feel it? >> if you touch it or something hits it. >> it's like the movie cars. they show the pistons and the engines going around you don't want one going at a different rate. >> something like this for max or a child like max should be cared for in a children's hospital. could any hospital? >> no. this is a fairly sophisticated, fairly subspecialized area of medicine. i'm a pediatric electrophysiologist. there slightly over 100 of us in the country. there not that many who do woo wha we do.

>> it's that skill that max needs. there only 56 of these hospitals in the whole country. as washington talks about budget cuts, the programs that train these doctors are on the chopping block. max is headed out to capitol hill to lobby for that program and argue against cuts to medicate that helps tens of millions of other kids. we will see how it goes. >> thanks. really inspiring story and thanks to max as well you can see the rest of dr. gupta's report on mini darth vader, max paige. washington feels the force. that's this saturday and this sunday, 7:30 a.m. eastern only here on cnn. i recommend you watch. the assassination of osama bin laden was embarrassing to the pakastanis. the former president long denied that bin laden was even in pakistan in an interview. i asked him whether his own government was shielding the al qaeda leader.

stand by

. u.s. tensions with pakistan taking center stage months after the death of osama bin laden. now there new signs the united states could be dealing with a whole new leader in the country. a leader it dealt with before. here's the correspondent. >> u.s.-pakistan relations, here's how the former president sees it. >> playing games. arrogance, insensitivity to each

other's national interests. >> it wasn't that way when he was president, mushareef says. he wants his job back. >> the next election will be the mother of all elections. >> push push lives in exile in london where he moved after resigning in 2008 to avoid being impeach impeached. this past february, a pakistani court issued an arrest warrant in connection with the 2007 assassination of opposition leader benazir bhutto. he claims his popularity in pakistan is growing and he is vowing to return to run in the 2013 election. >> president mushareef is a courageous leader and a friend of the united states. >> in 2001, the man president bush once called my buddy took a political risk at home to support the so-called war on terror. after the u.s. operation, this spring killed osama bin laden in pakistan. u.s. and pakistani relations are

on the razor's edge. at the woodrow wilson center they forcefully denied that he or the intelligence service, the isi knew bin laden was in his country. he chalked it up to negligence of the highestered. >> i am very sure that i didn't know. whether one believes it or not. >> mushareef blames the united states for abandoning pakistan in the latest 1980s and switching sides for india. he said the u.s. is insensitive to pakistan's concerns. >> the violation of our sovereignty and the dren attacks causing collateral damage of women and children and also towards the nuclear capability.

>> he visits on a regular basis. a former beginning woman said the jure is still out on whether mushareef can reclaim pakistan's presidency. >> he will have to explain a lot more about what he did and what he didn't do in order to persuade his country. >> cnn, the state department. >> the former president of pakistan, president mushareef. thanks very much for coming in. >> you're welcome. >> i am worried that al qaeda under the new leader is plotting something spectacular to get revenge against the united states for killing bin laden around the time of the tenth anniversary of september 11. how worried should i be and all of our viewers be right now? >> i think they should be worried. al qaeda definitely has threatened action in pakistan or

in the united states also. everyone must keep their guards up and take measures. >> what about the new leader of al qaeda. he was the number two, the egyptian-born terrorist. everyone believes she in pakistan hiding out. do you believe that? >> the expressions they have been comfortable. i refer to him as not in pakistan now. >> he like bin latten they believe is being protected by elements of the pakistani military or intelligence service and the security services somewhere in pakistan. do you believe that? >> i don't believe that, no. that i don't believe. >> bin laden was protected? >> i don't believe that. >> you believe five or six years he was hiding in a military

town, the west point of pakistan and no one knew about it? >> i believe that. first of all if he was there for five years. so i knew. >> have you been there? >> many times. >> tell us about that place. it was a big mansion within walking distance from all these military outposts. no one knew who was living inside? >> nobody around and thousands of people around there. no one knew he was inside. no one knew about him. >> you can look at me directly and say i had no idea that bin laden was hiding out? >> absolutely. i had no idea he was living there. >> do you believe no one in your government knew? >> no. whether there was a possibility he was hideing for me, i don't believe that also. >> why? >> they are my people.

i'm from them. he has to be protected and hidden. >> maybe they didn't trust you. >> they would have told me. >> maybe they wanted to protect you and say you know what, he is better off not knowing. >> if he was complicit or the army was gone, would we keep him there without security and without guards there so he could come and go any time? was this a person who could be used for any kind of leverage or a bargaining chip? i think it stands to reason at all. >> how bearsed when pakistan and bin laden is hiding in the town for five or six years in plain view? >> very embarrassing. extremely embarrassing. it's the case of utter negligence of the highest order and should be investigated.

we have to decide f. it was compli complicity, it's an issue. it is absolutely going against pakistan and the united states. let us be clear that there was complicity or negligence. they must convince the word and the united states against this issue that it was a case of negligence, not complicity. >> i have been told bite highest levels of government if they find out where the new al qaeda leader is, al zarqawi, in pakistan, they are not going to inform the government, but they are going to do to him what they did to bin laden, kill him. >> well, this is a very irresponsible thing. >> 'is that irresponsible? >> because -- >> they don't trust the elements. >> whether you trust or don't

trust, you can't violate the sovereignty. that is what people are disliking. against the united states. why do you want to do something where the public hates you so much in. >> there have been several incidents that the community had information about terrorists. plotting actions against troops or others and informed the government, but where the government goes in, all those people are missing and gone. somebody tipped them off that the military forces were here. look at osama bin laden. all of them have been caught by us. >> why is there this mistrust between the united states and back to the point that recently

the u.s. suspended $800 million in aid to pakistan. >> that is unfortunate and carries a wrong perception. they let me talk of $800 million, i believe i am told that this $500 million and reimbursement and $300 million for training and equipment for the training it will come back to the united states. that figure is not that great and and it's unfortunate. as far as lack of trust now, i don't know. they should not be lack of trust. >> the other source of deep concern is pakistan's nuclear arsenal. how secure is it from terrorists? >> they are very secure. >> are you worried about the security of pakistan? >> they are extremely secure. we will only lose them or they can get into the hands if they are terrorists or religious extremist groups with pakistan and governs pakistan.

at this moment, it's not possible. >> it's a fear? >> it is a fear if it's the integrity is no more. >> how many nuclear bombs does pakistan have? >> i don't know. >> about? >> i don't know. >> 100. >> i don't know. >> you knew when you were the president. you wouldn't know that as president of pakistan? >> they don't give me that figure. why am i concerned whether it's 89 years. i am not concerned about the figures what difference does it make whether it's 54 or 94 or 150. you met with the governor of texas, rick perry. what was that about? >> nothing. he wanted to meet. maybe exchange views on what it would be. >> did you get the impression he is thinking of running for president?

>> well, i think i did, yes. >> you think he will? >> you need to ask him, but i did get that impression. >> i agree and i think he will run, but i haven't met with him. you came away from the meeting thinking he is going to run? >> yes. >> let's talk about you a little bit. how do you feel? >> i hope i am not violating the code of confidentiality. >> it already has been. let's talk about your health. how are you feel something? >> very good. excellent. you getting ready to go back to pakistan to run for president? >> we have a parliamentary system and then we decide whether they want to be the prime minister or the president. the first aim is to win in the next election. >> 2013 in. >> 2013. >> always good to speak with you. thank you for coming into our situation room and good luck to you and all the people of pakistan. >> thank you very much. always a pleasure.

thank you very much. >> what's the best way to sell jihad to impressionable children? al qaeda is asking that same question. the answer is appalling and shows just how low they will go to try to recruit new terrorists a supervisor. supervisor is genius...i transfer. transfer! transfer! transfer! transfer! transfer! hello...my name is... peggy? come on!!! hello? want better customer service? switch to discover. ranked #1 in customer loyalty. it pays to discover.

companies have used cartoons to market to children. shockingly, terrorists could be adopting the same tactics they are thinking of making their pitch with cartoons, hoping to cook kids early and teach them to embrace a life of violence. here with more on the sinister plot. what's going on? >> officials said they have done damage to al qaeda recently. now maybe out of desperation, maybe out of a desire to tap into the next generation of terrorists, al qaeda is making an animated pitch to a younger demographic. it is described as disme in-like and boys in battle fatigues and

a rocket launcher. you are looking at still frames of a terrorist recruiting movie aimed at children. supporters say they are producing an animated film glorifying the operations according to terror trackers. a posting said it features heroic actions and raids, armed clashes and assassinations. i spoke about the proposed film with terrorism analyst, brian fishman. >> what does it say about al qaeda at this point? >> al qaeda is looking for ways to get its message out to more people. its core thesis stays the same and tries to sell the mythology of violence. >> that are i cautioned cnn and said it appears to be in the idea stage. it shows the depth they are willing to go to manipulate children. fran townsend agrees >> they are taking the prop granda video showing you how desperate they are. the government has been

effective against soldiers using droen drones and allies. they are desperate and this is evidence for that. >> the jihadist said he will submit it for approval. that affiliate managed to get an underwear bomb on to a plane and cartridge bombs on to the planes. >> narhas been a leader from the videos of the american born jihadi. they are in inspire magazine. another group published a women's magazine with beauty and marriage tips. experts say there is a risk to producing a children's movie. >> how can a campaign like this backfire? >> people that are motivated to fight for jihad should not listen to their parents. it is a direct front to a system that i think not just muslim americans and around the globe and most people find offensive.

>> there is all right a brush back with when the filmmakers released, they asked for input. terrorist monitors said some replied they should avoid using the name al qaeda fearing it would alienate supporters not as popular as it once was. >> targeting children by al qaeda for jihad, it's not entirely new, is it? >> it's not. brian said al qaeda has in the past produced video games and they once took a code off western video games and relaced the images that produced a video called -- night of the bush capturing. you as the player would shoot and kill figures with president bush's head on them and the ayatollah's head on them. this was strange and effective in recruiting younger terrorists. >> worrisome as well. a check of the top stories coming up next and the casey anthony case touched a nerve in

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. just by the end of the situation, a historic announcement over at the pentagon. lisa sylvester has the details and other top stories. what's going on? >> pentagon officials tell us that friday they will announce the repeal of don't ask, don't tell. that's the policy prohibiting openly gay men and women from serving in the military. a bill repealing the past. it doesn't take effect until the defense secretary and chairman of the joint chiefs of staff certify a repeal won't harm the readiness. there will be a 60-day waiting president before full implementation. an epic adventure in space is over. the space shuttle atlantis landed early this morning, ending a program that began 30 years ago. the drama of the moment didn't escape. you notice of mission control or

the shuttle's commander >> having fired the imagination of a generation, the ship like no other and its place in history secured. the space shuttle pulls into port for the last time. the voyage at an end. pafr after serving for 30 years, it earns a place in history and came to a final stop. >> what a moment there. americans are deeply divided about the decision in a poll, half of the polls said the program's end was bad for america. equal percentage believe it was good or has no impact. this turt cell not hell on wheels, but he gets around pretty well. they replaced his front left leg with a switchling wheel. it forced vets to amputate his

leg skprp not sure how he would respond to the wheel that was glued to his shell. she moving well and certainly moving on with his new life. getting around slowly, but they were slow to begin with. >> good for them. >> i don't know if he is winning any races. >> whatever life he has. jack cafferty is asking should calling for the ax sass nation of the president be protected as free speech. your e-mail coming up. dunking casey anthony. we have a look host: do people use smartphones to do dumb things? man 1: send, that is the weekend. app grapgic: yeah dawg! man 2: allow me to crack...the bubbly! man 1: don't mind if i doozy. man 3: is a gentleman with a brostache invited over to this party? man 1: only if he's ready to rock! ♪ sfx: guitar and trumpet jam vo: geico. 15 minutes could save you 15% or more on car insurance.

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get right back to jack for "the cafferty file." jack? >> the question this hour, wolf, is should calling for the assassination of the president be protected as free speech. an appellate court in san francisco said yes, it's covered under free speech. some of you disagree. a.j. in nebraska, said, free speech is free speech, there's no gray. however, saying you're going to kill someone is a threat and is illegal. saying you wish or would like to see someone else kill a certain individual is perfectly okay. kathy writes, this type of speech is worse than yelling fire in a crowded theater and these idiots ought to be prosecuted to the full extent of the law. joe in new york writes, calling

for the assassination of the president should be treated as treason. there's no room for free speech when the agenda is to annihilate the symbol of our nation. kevin in new mexico, no, it should not be protected as freedom of speech. it ought to be considered a terrorist threat to take a life. if you're not happy who the president is, wait until the next election and vote for someone else. will in montana writes, my brother suffers from paranoid schizophrenia, he threatened president reagan's life on two occasions and he served two years each time in a penitentiary. the authorities deemed his threat real enough to put our family under scrutiny for years. it made it difficult for me to get a secret clearance while in the military, my mail never arrived unopened and after 9/11 i was on a threat list and forced to fly the day after my scheduled flights. kirk in minnesota writes, if we want to pretend the constitution actually means anything, then, sadly, the answer is yes. however, i'm fairly sure the fanatical right will only say

that it's free speech as long as it only pertains to president obama. james in ohio says, no way can it be protected speech, no way, no way. also i believe that burning our flag should not be protected speech. call me old fashioned. i don't care. and ray in tennessee writes, yes, it should, jack. there's nothing in the constitution that says free speech shouldn't apply to idiots, too. if you want to read more on this, go to my blog. dunking boots work best when they feature a well-known villain, this one found a way to make a money with a look-alike for one of the most hated women right now in the united states.

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and we'll provide the coverage you need at the right price. liberty mutual auto insurance -- responsibility. what's your policy? unlike fish oil, megared softgels are small and easy to swallow with no fishy smell or aftertaste. try megared today. lots of people wish they'd been on the jury that found casey anthony not guilty. as cnn's jeanne moos shows us a dunk tank in lexington, kentucky, gave them the next best thing. >> reporter: step right up, folks, and dunk casey anthony. >> all right, guys. >> reporter: actually, don't bother. the dunking booth has already been shut down, but don't blame it on the casey anthony look-alike. >> you hear the good news? i'm innocent! >> reporter: she knew how to

taunt her tormenters. >> there were tougher girls in prison than you. >> reporter: oh, yeah? the lion's club in lexington, kentucky, decided to give the casey anthony dunking booth a try for their bluegrass fair. >> i think it's going a little bit too far, because she's already suffering and god is the one who will give her the punishment. >> i think it's funny, and i think it attracts a lot of people. it doesn't offend me at all. >> reporter: but within a day the lion's club decided to ditch the dunking booth, saying it was distracting from their mission of making money for charity. whether you think it's funny or tacky, the dunking booth wasn't the only example of black humor at casey anthony's expense. a deli in seattle has attracted attention with this sign -- casey anthony says city market deli deals are so good, i feel like i'm getting away with murder. >> people love it. they take pictures of it. they laugh at it. >> reporter: deli manager morehead has been linking signs

linked to news and scandals for seven years. fans have compiled them on sites like flickr, from charlie sheen to prince william to rupert murdoch. >> only thing he wants to hack into is one of our corn dogs and maybe he can choke oit. >> reporter: morehead says the only complaints of bad taste he's gotten about his casey anthony sign came from two florida tourists. you don't feel at all, like, tacky about it? >> no. i walk the line of -- of taste on these signs. >> reporter: but where in the world is the real casey anthony? we know one place she's not. there were rumors she was hiding on hiraldo rivera's sailsin s i vessel. >> reporter: but his wife came home saying his daughter's birthday party plans were in trouble. >> three members from camp said she would have difficulty coming here if she was here. i said, are you buying into this